Unemployment rate for foreign-born workers fell below 5% last year, lower than the rate for native-born workers for the first time.

By Chris Isidore, CNNMoney.com senior writer

April 6, 2006: 5:30 PM EDT

NEW YORK (CNNMoney.com) -
The unemployment rate for immigrants working in the United States fell below the rate for U.S.-born workers in 2005 for the first time since the Labor Department started tracking those numbers a decade ago.

Numbers from the department's Bureau of Labor Statistics show that unemployment for native-born workers fell to 5.2 percent last year from 5.5 percent in 2004. But the unemployment rate for those who were born elsewhere sank to 4.6 percent last year from 5.5 percent the year before.

The strong home-building market, which lifted construction hiring, and a rebound in travel and hospitality were seen as among the factors helping immigrant workers, since those sectors employ a lot of foreign-born workers.

The statistics suggest that when the job market is weak, foreign-born workers have a harder time finding work than those born in the United States. But during strong job markets, employers turn more to workers born in other countries.

Overall there were 21 million foreign born workers in 2005. But about 40 percent of those foreign-born workers have already become U.S. citizens. Still that leaves 12.5 million non-citizens with jobs, or about 9 percent of those who have jobs, according to the Labor Department household survey. The unemployment rate for non-citizens is 5.2 percent, which is the same as for the native born.

Who's hiring immigrants

Construction employed the greatest number of foreign born workers in 2005 -- about 2.5 million immigrants, or about one out of every eight who have a job here. It also has among the highest concentrations of foreign-born workers -- nearly 22 percent of the overall work force.

Retailers, with 2.1 million foreign-born employees, and restaurants and bars, with 1.7 million immigrants working for them, are the No. 2 and No. 3 sectors in terms of using immigrant workers.

The 321,000 immigrants working in households account for 39 percent of that job category, making it the category with the greatest concentration of foreign-born labor.

Despite the popular image of farm workers being the typical immigrant worker, the relatively low number of employees in the mechanized agricultural industry limits the number of jobs it provided to foreign-born workers. The BLS survey found only about 371,000 foreign-born agriculture employees in 2005, which equates to about 35 percent of that job classification. But it represents only 1.8 percent of immigrants who work here.

The hotel industry has one of the highest concentrations of foreign-born workers -- 28.3 percent, trailing only the textile and apparel industry, farm labor and household workers for the percentage of immigrant help. And it is a larger employer in terms of foreign-born workers -- about 443,000 in 2005 -- than any of those higher-concentration industries.

The statistics show that 40 percent of the non-citizens with jobs here are Mexicans. That's far above the No. 2 country, El Salvador, which 4.3 percent of the non-citizens with jobs here call home. India is next with 4 percent of non-citizens with jobs here.

Excluding Mexico, the rest of Latin and South America and the Caribbean provide 25 percent of non-citizens working here, while 18 percent are from Asia and the Pacific and 9 percent are from Europe.

The bureau's numbers don't distinguish between those non-citizens who are working here legally and those here illegally.

Congress is now debating immigration reform that includes proposals to allow some current illegal immigrants to get guest worker status, and another bill that would impose tough penalties on immigrants here illegally and those who employ them.

But Congress is also weighing proposals to raise limits on various types of work visas that are used by those foreign citizens who are working here legally.

Impact on wages?

The impact that the foreign workers have on wages is more difficult to judge from the numbers. In some fields the foreign born workers are paid significantly less than their native born co-workers.

For example the average weekly wage of a foreign-born construction worker is $563, or about 30 percent less than the average wage for the U.S.-born construction worker. But the statistics don't make any distinction between unskilled manual laborers in the sector and skilled tradesmen, which is a field far more dominated by native-born workers.

In some other low wage sectors which are major employers of foreign-born workers, there is relatively little difference in wages. Foreign-born household workers make only 4.2 percent less than their native-born counter parts. Retailers pay their immigrant employees only 6 percent less, on average, than their U.S. born help.

Then there are some higher paid sectors where the average pay for foreign born workers is also comparable or even a little better than their native-born colleagues.

Computer and electronic products is a sector where about one job in four is held by a foreign-born worker, while their average pay is only 6.5 percent below that of U.S.-born workers in the sector.

"When major companies in hi tech go out to recruit at a U.S. graduate school, they're encountering half the student body in some of these fields being foreign nationals, maybe more," said Rodney Malpert. director of U.S. immigration services for Phoenix law firm Littler Mendelson Bacon & Dear. He said the costs employers have to pay for the various visa and immigration filings make it more expensive, not less, to hire immigrants.

"Employers don't do this out of some notion that they are going to cheap labor. They're doing this because that's what the labor pool is," said Malpert.

The labor market is particularly tight in the health care industry, which has turned to foreign-born residents to fill jobs -- hospitals and health care services employ 1.9 million foreign born workers between what the BLS counts as two separate sectors, or about 14 of their combined work force. The foreign born hospital workers get paid 7 percent more on average than their U.S.-born colleagues, while foreign-born health care services workers outside of hospitals get 4 percent more on average.

The unemployment rate is based upon the survey of households by the BLS, rather than the department's survey of employers, which calculates job gains and losses in different sectors. It also excludes those who are not counted as being in the labor force for one reason or another.

The household survey is believed to be a relatively accurate way of capturing workers who are both documented and undocumented. These results from the household survey are available on the BLS Web site, although they have not been released in a separate report yet.

The household and employer surveys form the basis of the monthly jobs report, with the March data due to be released Friday. Economists surveyed by Briefing.com are looking for the U.S. employers to have added 190,000 workers in March, down from the 243,000 they added in February. The unemployment rate is forecast to remain at 4.8 percent.

But Treasury Secretary John Snow said Wednesday that Friday's upcoming jobs data would be "good numbers."